Financial Markets Weekly Outlook for June 25-29

Following the results of the Greek elections the forex and commodities markets didn’t seem to react much to the news. The main event of last week was the decision of the FOMC to extend operation twist throughout 2012 by another $267 billion. The FOMC also revised down its projection for the U.S economy. There are several important reports and events that may affect the financial markets during the upcoming week including: EU Summit about the debt crisis, U.S new home sales report, Canada’s GDP, U.S’s final estimate of GDP for Q1 2012, Great Britain new borrowing, U.S consumer confidence report, Japan’s retail sales, U.S pending home sales, China’s manufacturing PMI and U.S. jobless claims. Here is an economic news calendar forecast for June 25th to June 29th regarding the U.S., EU, China, Japan, Canada, Australia and Great Britain.   

(All times GMT):

Monday, June 25th

15:00 – U.S. New Home Sales: This report will present the developments in new home sales May 2012; in the previous monthly report (for April 2012), the sales of new homes rose to an annual rate of 343,000 – a 3.3% increase (month over month); if the number of home sales will continue to rise, it may further indicate a pullback in the U.S real estate market which may also affect the strength of the US dollar.

Tuesday, June 26th

07:00 – German Consumer Climate: Gfk group will publish their German consumer climate index. If this report will be positive it might also have a positive effect on the Euro;

09:30 – Great Britain Net borrowing: this update will show the monthly developments in the public sector net borrowing for May 2012; as of April 2012, the net borrowing declined to -£18.8 billion;

10:00 – Great Britain Inflation Hearings: this is a quarterly hearing of the MPC members in front of the Parliament’s Treasury Committee; the members will refer to the recent changes in GB’s inflation and their economic outlook. this hearing may affect the direction of the British pound;

15:00 – U.S Consumer Confidence: according to the previous monthly update, the consumer confidence index declined in May (M-o-M). The current expectations are that the May index may fall; this report might affect commodities markets including the natural gas market;

Wednesday, June 27th

13:30 – U.S Core Durable Goods: This report will examine the changes in U.S. orders of durable goods in the manufacturing sector during May 2012. This report may indirectly show the shift in U.S. demand for commodities including crude oil. As of April 2012, new orders of manufactured durable goods increased by $0.3 billion to $215.5 billion; if this report will continue to be positive then it could strengthen the US dollar and also affect gold oil and silver prices;

15:00 – U.S. Pending Home Sales: This report present the changes in pending home sales in the U.S. for May 2012; in the recent report the pending home sales index decreased by 5.5% (M-over-M). These data are another indicator for the development in America’s real estate market; based on last week’s results on housing sales (new and existing) the pending sales may continue to fall. In such a case US dollar may further weaken;

15:30 – U.S Crude Oil Stockpiles Report: the EIA (Energy Information Administration) will release its weekly shifts on the U.S oil and petroleum stockpiles for the week ending on June 22nd; in the previous weekly report for June 15th, stockpiles increased by 11 million bl to 1,795.5 million bl;

00:50 – Japan Retail Sales: According to the previous report, the Japanese retails sales rose by 5.8%; this report could affect the path of the Yen currency;

Thursday, June 28th

09:30 – Great Britain Current Account: This will report will show recent shift in the balance of payment of Great Britain that reached in the recent report to 8.5 billion pound; this report may affect the GBP/USD currency;

All Day (for two days) – European Council Meeting: The European Council Meeting will be held in Brussels and the EU ministers of finance will convene and talk about the recent changes in Europe including in Spain and Greece. If a decision will be made there, it could affect the forex markets;

13:30 – Final Estimate of U.S GDP 1Q 2012 : This will be the final estimate of U.S’s first quarter 2012 real GDP growth. In the recent estimate the U.S GDP in the first quarter rose by 1.9%; in the 4Q2011 the GDP growth rate was 3%. This shows a decrease in the growth rate for the US’s GDP. If there will be a sharp shift in this estimate it could also affect not only the US dollar but also commodities prices (for the previous estimate of US 1Q GDP).

13:30 – U.S. Department of Labor– Jobless Claims Weekly Update:  this update will pertain to the weekly shifts in the initial jobless claims for the week ending on June 23rd; in the latest report the jobless claims declined by 2k to 387,000; this upcoming weekly update may affect the U.S dollar and consequently commodities rates;

15:30 – EIA U.S. Natural Gas Storage Update: the EIA weekly update of the U.S. natural gas market will refer to the recent developments in natural gas production, storage, consumption and price as of June 15th; in the previous report, natural gas storage increased by 62 Bcf to 3,006 Bcf;

Friday June 29th

07:00 – German Retail Sales: This monthly report will analyze the developments in German retail sales during May. In April 2012, retail sales increased by 0.6%; if this report will continue to be positive then it might strengthen the Euro;

08:00 – KOF Economic Barometer: this report offers a forecast of the Swiss economy in the months to come. In the previous press release, the report predicted that the Swiss Economy is headed towards an expansion in 2012;

09:00 – Euro Area Monetary Development: This monthly report will examine the development of the M3, M1 and loans to private sector in the Euro area during May 2012. In the previous April report, the annual growth rate for M3 sharply fell to 2.5%. The M1 also decreased to 1.8%. Finally, the annual growth rate of loans to private sector decreased to 0.6%. If the M1 and M3 will continue to contract this could serve as another indicator for the declining inflation pressures in the  Euro Area, and it  may affect the future ECB interest rate decision;

Tentative – Italian 10 Year Bond Auction: the Italian government will issue a bond auction; in the previous bond auction, which was held at the end of May, the rate reached 6.03%;

10:00 – Euro Area Flash Estimate of Annual Inflation: the inflation in Euro Area reached 2.4% in May. If the upcoming inflation rate estimate will continue to decrease, it may raise the chances of ECB lowering the interest rate;

10:30 –Governor King speaks: The governor of Bank of England will give a speech; in his speech he could offer some insight in regards to the recent BOE interest rate decision and monetary policy; this speech may affect the British Pound trading;

13:30 – Canada’s GDP by Industry: the report will present the changes in major industrial sectors for April 2012. In the previous report regarding March 2012, the real gross domestic product edged up by 0.1%. This report may affect the strength of the Canadian dollar exchange rate which is strongly linked with commodities prices;

2:00– China Manufacturing PMI: according to the previous Manufacturing PMI report regarding May 2012 the Manufacturing PMI decreased to 50.4; this index indicates the developments in China’s manufacturing sectors; if this downward trend will continue, this may also adversely affect commodities prices;

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